Brazil: Economic growth stages a recovery in Q4
February 27, 2014
In the fourth quarter, GDP increased 0.7% over the previous quarter in seasonally-adjusted terms, marking a turnaround from the 0.5% decline registered in Q3. The result beat market expectations of a 0.3% increase. The expansion was driven by improvements in the external sector and in fixed investment.
On the domestic side, fixed investment rebounded from a 2.0% contraction in Q3 to a 0.3% rise in Q4. Conversely, private consumption added 0.7% over the previous quarter (Q3: +1.0% quarter-on-quarter). Government consumption fell slightly from a 0.9% expansion in Q3 to a 0.8% increase in Q4.
On the external side of the economy, exports of goods and services rebounded from a 1.2% contraction in Q3 to a 4.1% expansion in Q4. Imports fell 0.1%, which was above the 0.5% decrease recorded in the previous quarter.
The economy added 1.9% in Q4 compared to the same quarter of the previous year, which was down from the 2.2% increase tallied in Q3. In the full year 2013, GDP increased by 2.3%, which was greater than the 1.0% growth registered in 2012.
The Central Bank expects GDP to grow 2.3% in 2014 according to its Inflation Report from December. LatinFocus Consensus Forecast panelists expect the economy to expand 2.1% in 2014, which is unchanged from last month's estimate. For 2015, the panel sees GDP growth at 2.2%.
Author: Carl Kelly, Economist